Wyoming Crypto Tax Services

Wyoming Crypto Tax Rules: Quick Summary

Wyoming residents pay zero state tax on crypto but must comply with all federal reporting requirements. Here are the key facts for 2025:

• No State Income Tax: Wyoming does not impose state income tax on individuals or businesses, including cryptocurrency transactions

• No State Capital Gains Tax: All crypto gains are exempt from state taxation regardless of holding period

• Federal Tax Applies: Short-term gains taxed at ordinary rates up to 37%; long-term gains at 0%, 15%, or 20% plus 3.8% NIIT for high earners

• Wallet-by-Wallet Tracking: Revenue Procedure 2024-28 requires separate cost basis tracking per wallet starting January 1, 2025

• Form 1099-DA: Custodial brokers report gross proceeds for 2025; cost basis mandatory for assets acquired after January 1, 2026

• $3,000 Loss Limit: Federal limit on deducting capital losses against ordinary income with unlimited carryforward

 

America's Most Crypto-Friendly State

Wyoming has enacted over 30 blockchain and cryptocurrency laws since 2018, establishing the most comprehensive crypto-friendly legal framework in the United States. Combined with no state income tax, Wyoming attracts crypto investors, DAOs, and blockchain businesses seeking favorable treatment.

Key Wyoming Crypto Legislation

• HB 70 (2018): Exempts utility tokens from state securities laws

• HB 19 (2018): Exempts cryptocurrency from Money Transmitter Act requirements

• SF 125 (2019): Digital Asset Statute classifying digital assets as intangible personal property under UCC

• HB 74 (2019): Created Special Purpose Depository Institutions (SPDIs)—Wyoming-chartered banks for digital asset custody

• SF 38 (2021): First state to recognize DAOs as legal entities through DAO LLC framework

• DUNA Act (2024): Created Decentralized Unincorporated Nonprofit Association structure

• SF 96 (2024): First-of-its-kind crypto bankruptcy protection law

 

Special Purpose Depository Institutions (SPDIs)

Wyoming's SPDI charter allows fully-reserved banks to provide custody services for digital assets. Four institutions have received SPDI charters including Kraken Financial, providing institutional-grade custody options for Wyoming entities.

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At Monaco CPA, we provide remote crypto tax services to Wyoming residents and entities. While Wyoming's lack of state income tax simplifies state obligations, federal compliance remains essential.

 

What Wyoming Residents Still Owe

No state income tax does not mean no taxes. Wyoming crypto investors must comply with all federal tax obligations on cryptocurrency transactions.

Federal Income Tax Rates

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2025 Federal Compliance Requirements

• Revenue Procedure 2024-28: Wallet-by-wallet cost basis tracking effective January 1, 2025. FIFO is the default method unless you make specific identification elections

• Notice 2025-7: Provides temporary relief through 2025 for specific identification methods

• Form 1099-DA: New IRS form for custodial broker reporting of gross proceeds starting 2025

• Form 8949: Required for reporting all crypto sales and exchanges

• Schedule D: Summary of capital gains and losses

 

Federal Taxation of Digital Assets

The IRS treats cryptocurrency as property for tax purposes. Every sale, exchange, or use of crypto can trigger capital gains taxes that must be reported on your federal return.

Taxable Events

• Selling cryptocurrency for USD or other fiat currency

• Trading one cryptocurrency for another

• Using crypto to purchase goods or services

• Receiving crypto as payment for services (ordinary income)

• Mining rewards when received (ordinary income)

• Staking rewards when you have dominion and control (ordinary income per Revenue Ruling 2023-14)

• Airdrops and hard forks when received

 

Non-Taxable Events

• Buying crypto with USD

• Transferring crypto between your own wallets

• Gifting crypto (gift tax rules may apply for large gifts)

• Donating crypto to qualified charities

 

Wyoming DAO LLC Taxation

Wyoming's DAO LLC framework provides legal recognition for decentralized autonomous organizations, but federal tax obligations remain. Understanding the interplay between Wyoming's favorable laws and federal requirements is essential for DAO participants.

DAO Entity Classification

• Single-Member LLC: Disregarded entity; file Schedule C with Form 1040

• Multi-Member LLC (default): Partnership taxation; file Form 1065 with K-1s to members

• Corporate Election: File Form 8832 to elect C-corp or S-corp treatment

 

Token Income Recognition

Governance tokens, airdrops, and distributions from Wyoming DAOs are generally taxable as ordinary income at fair market value when received. The Wyoming entity structure provides liability protection but does not exempt members from federal taxation.

 

Wyoming Sales Tax Treatment

Wyoming provides favorable sales tax treatment for cryptocurrency with a 4% state rate (5.44% combined average with local taxes).

• Virtual Currency Exemption: SF 111 (2018) exempts virtual currency from sales and property tax

• Mining Equipment: Sales tax exemption available for operators who have mined less than $5 million in coins

• Crypto Purchases: Using crypto to buy goods triggers sales tax on the goods, not the crypto

 

Tax Planning Strategies

Wyoming's zero-state-tax environment creates planning opportunities, but federal strategies remain important for minimizing your overall tax burden.

Tax-Loss Harvesting

Cryptocurrency is not subject to wash sale rules under current federal law. You can sell crypto at a loss and immediately repurchase to realize the loss for tax purposes while maintaining your position. This strategy can offset gains and reduce federal tax liability.

 

Long-Term Holding

Holding crypto for more than one year qualifies gains for preferential federal long-term capital gains rates of 0%, 15%, or 20% versus ordinary income rates up to 37%.

 

Estimated Tax Payments

With no state tax, Wyoming residents only need to make federal estimated payments if they expect to owe $1,000 or more. Quarterly deadlines are April 15, June 15, September 15, and January 15.

 

Services for Wyoming Crypto Investors and DAOs

Tax Preparation

• Federal Tax Return Preparation: Complete Form 1040 with Form 8949 and Schedule D for individual crypto activity

• DAO Entity Returns: Partnership returns (Form 1065), corporate returns, or K-1 preparation for DAO members

 

Compliance

• Transaction Reconciliation: Rev. Proc. 2024-28 compliant wallet-by-wallet tracking

• Form 1099-DA Matching: Reconciling exchange-reported data to prevent IRS CP2000 notices

• DAO Tax Structure Analysis: Evaluating optimal entity classification and tax treatment

• Token Income Recognition: Proper treatment of governance tokens, airdrops, and distributions

• Treasury Activity Reporting: Tracking DeFi activities in DAO-controlled wallets

 

Planning

• Tax-Loss Harvesting: Strategic loss realization without wash sale restrictions

• Estimated Tax Planning: Quarterly federal projections to avoid underpayment penalties

 

IRS Representation

• IRS Audit Defense: Representation before the IRS if needed

 

Areas We Serve in Wyoming

We serve Wyoming crypto investors and entities statewide through our remote service model:

• Cheyenne: State capital and business registration hub

• Casper: Central Wyoming

• Jackson Hole: High-net-worth community

• Laramie: University town

• Statewide: All communities via secure portal and video consultation

 

We also serve Wyoming-registered DAOs and LLCs whose members may be located anywhere in the country or world.

 

Frequently Asked Questions

I formed a Wyoming DAO LLC. What federal tax returns do I need to file?

It depends on your entity classification and number of members. A single-member LLC typically files Schedule C with your personal Form 1040. A multi-member LLC defaults to partnership taxation, requiring Form 1065 and K-1s to members. You can also elect corporate taxation. The optimal choice depends on your specific situation.

 

Is Wyoming's no-income-tax status at risk of changing?

Wyoming's constitution prohibits a state income tax. Changing this would require a constitutional amendment approved by voters. Wyoming has been income-tax-free for its entire history and this is unlikely to change.

 

I'm considering forming a Wyoming entity for my crypto activities. Does that help with taxes?

Wyoming's entity-friendly laws are valuable for liability protection and legal clarity, but they don't eliminate federal tax obligations. If you're a U.S. person, you owe federal taxes on your crypto gains regardless of where your entity is formed. The benefit is Wyoming's no-state-tax status and favorable legal framework, not federal tax avoidance.

 

Does Wyoming's digital asset framework help with my cost basis tracking?

Wyoming's laws clarify property rights but don't change IRS requirements. You still must comply with Rev. Proc. 2024-28 wallet-by-wallet tracking and all federal reporting requirements.

 

I received governance tokens from a Wyoming DAO. Are they taxable?

Generally yes. Tokens received for services, contributions, or as compensation are typically taxable as ordinary income at fair market value when received. The Wyoming entity structure doesn't change this federal tax treatment.

 

How does Wyoming compare to other no-income-tax states for crypto?

Wyoming stands out for its comprehensive blockchain legislation beyond just tax benefits. Florida, Texas, Nevada, and South Dakota also have no state income tax, but Wyoming uniquely offers DAO LLC recognition, SPDI banking charters, and extensive digital asset legal protections. Washington State has no income tax but imposes a 7% capital gains tax on gains over $262,000 (though crypto is currently excluded).

 

Get Expert Help with Wyoming Crypto Taxes

Wyoming's crypto-friendly laws create unique opportunities—and unique compliance requirements. Whether you're an individual investor or operating through a Wyoming DAO, let's discuss your situation and ensure proper federal compliance.

 

Schedule a Consultation

 

Phone: (862) 320-9554
Email: Greg@MonacoCPA.CPA

 

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